PARIS – The French government is working on further measures to limit the surge in electricity prices, the finance minister said on Friday, wary of the political fallout three months before a presidential election.
“Look what’s going on in Kazakhstan, it’s quite indicative of what can happen when energy prices explode, it’s politically dangerous,” Finance Minister Bruno Le Maire told journalists in a New Year address.
Energy prices can be sensitive topic in France. A 2018 fuel tax increase triggered months of regular violent street protests that spiralled into a broader anti-government movement.
As energy prices surged worldwide last year, the government committed to shield households by capping an increase in regulated tariffs for 2022 at only 4% in February. Since then, prices have risen further and the tax cut on power prices that was supposed to limit the increase is no longer enough.
“If we don’t find a solution to the electricity prices in the days that come, the French will see at the end of January an increase of 35-40%,” Le Maire said.
“There’s thousands of jobs on the line. That’s why we have been working night and day for the last two weeks to find a solution that guarantees the 4% power price ceiling and protects electricity intensive companies,” he said.
Paris has considered forcing state-controlled power company EDF to sell more nuclear production to its competitors at a preferential rate, preventing operators from paying very high prices in wholesale markets that would also have to be applied into the regulated tariff for households.
Le Maire said he had spoken to EDF head Jean-Bernard Levy and EU Competition Commissioner Margrethe Vestager, who is in Paris with other European commissioners for the start of France’s six-month presidency of the European Union.